Big Day over?

Music festivals have always been a tough gig for promoters, but now many festivals are struggling.

Australia Day, 1975. The very last Sunbury Rock Festival begins near Melbourne with headliners Deep Purple as well as Daddy Cool, Skyhooks, Renee Geyer and Sherbet. Victoria had just come out of a long and unusually cold summer spell and it still hadn't warmed up. Steady rain fell. Sunbury ticket sales were low.

The festival started in 1972 but by '75 ticket prices had more than tripled to $20 for the three days. A second stage had been added the year before which many felt detracted from the ''vibe''.

Big Day Out at Flemington Racecourse. Getting down in the Boiler Room.Credit:Justin McManus

Numbers had been as high as 35,000 for each of the three years before. But by '75 the company behind the event, Odessa Promotions, was in trouble, despite hiking the entry price up and getting a big-name international headliner.

And why didn't AC/DC play? They were on the bill, near the top in fact. According to an issue of that year's Juke magazine a fight broke out backstage between roadies of Deep Purple and AC/DC over who was the true headliner and AC/DC packed up and left. There was also latent anger at the British heavy metal band - one of only a few from overseas to play Sunbury, in this instance with an exclusivity deal - pocketing a massive fee (for the time) of $60,000 while local bands scrambled to be paid.

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Future Music Festival at Flemington.Credit:Jason South

The festival flopped with only 16,000 punters. The cost, the weather, the fact it had changed since it began and also a sense of overkill were the reasons. Then Odessa went into liquidation leaving debts unpaid. Like many music promotion companies before and since it had overcapitalised and could not pay the bills.

Fast forward to 2013 and a lot of things have changed but a lot of things have not.

In September alone, the Harvest Festival and Pyramid Rock (on Phillip Island at New Year's Eve) were cancelled. The previously untouchable Big Day Out's scheduled second day in Sydney was cancelled because of poor ticket sales, against a background of consistent talk in the music industry that the venerable festival is terminal and about to die.

The indigenous Boomerang Festival got only its minimum crowd number despite being organised by the promoters of the Byron Bay Bluesfest. The hip-hop festival Supafest was postponed for six months with the organisers in massive debt and, now, in the Victorian Supreme Court facing creditors.

Peats Ridge Festival on the central coast of New South Wales folded, then Sydney's Playground Weekender and the national hip-hop shows Rap City and Movement.

Then Future Music - the country's largest electronic dance music promoters - went into liquidation with creditors such as staging and lighting companies in New South Wales, Queensland and Victoria lining up to get money owed. The amount in question is understood to be as much as $5million.

Australian music industry kingpin Michael Gudinski has stepped in as a financier in an unorthodox deal involving shifting assets between multiple companies in order to help Future's high-profile events get through the busy summer festival season.

Meanwhile Future's main competitor, Stereosonic, was sold in that heady month of September to an American events company called SFX for $US75million. Last year Stereosonic - run by a group of young former DJs and club promoters in Melbourne - sold around 200,000 tickets nationally, earning about $30million.

It's boom and bust - but now the bubble that began inflating in the mid-to-late 2000s has burst, creating multimillionaires, bankrupts and potential bankrupts in the process. It has also created deep seams of bitterness between some of the major players, few of whom would talk to us for this story, such is the paranoia and competitiveness at play in the marketplace.

As one well-known music industry figure told Fairfax Media this week: ''The festival scene in this country has become a mess.''

This is not a specifically Australian problem - although it is magnified here to some extent by the high Australian dollar (meaning more young people opt to spend disposable income on travel) and by the saturation of the local summer festival marketplace, fuelled by European and North American rock bands and electronic dance acts coming here in their ''off season''.

At the recent Bigsound music industry conference in Brisbane one of the seminars was called Festivals - Are They The New Pub Rock?

The last few years have seen an almost blanket saturation: too many festivals offering much the same entertainment for a similar demographic. Some have survived and even thrived, such as The Falls Festival in Victoria and Tasmania (and now Byron Bay), Splendour in the Grass and the Byron Bay Bluesfest, also in Byron Bay, and Stereosonic, which has this year ambitiously added an extra day in each city.

Smaller, boutique events such as Laneway (nationally) and country Victorian camping festivals such as Meredith, Golden Plains and Rainbow Serpent have also done well by restricting crowd numbers and offering a more curated, niche experience.

Music touring veteran Peter Noble - of the Byron Bay Bluesfest, which has hosted B.B. King, and Bob Dylan - says the perception that there are too many festivals is wrong.

''It might be in one sector of the industry, but the rest of us are flourishing. Show me a more successful festival than the Tamworth Country Music Festival or Groovin' the Moo (a national touring festival in regional cities), which has realised you take music to the country, or the Woodford Folk Festival, which has come back with two record years in a row after being flooded out.''

Others working behind the scenes in the festival industry hope that the current chaos is a ''readjustment'' ushering in a new breed of festival.

One festival insider said: ''It is about to be a golden age of festivals. The crowds are coming earlier, they are watching more diverse acts, they know the material of even the most obscure stuff we book mostly via YouTube or Spotify. Everyone listens to way more music than they used to, and for a lot less time before moving on to the next thing. The festival context is surely the one that can represent the reality of how people are listening to music in their homes and on iPods. New styles of shows will reflect this in time.''

Peter Noble says his Bluesfest sold half the tickets for 2014's event within six weeks of the 2013 event finishing.

But he says there are too many copy-cat festivals catering to the Triple-J demographic where the headline act is not worthy and tickets too expensive. ''Economics tells you sustainability will only occur if the dilution of a business does not mean there's too much product on offer.''

In the British summer of 2011, 30 festivals were cancelled because of poor ticket sales. Also, they're getting more expensive to run: with a downturn in profits from recorded music, bands and the agencies representing them are increasingly mercenary in wanting to maximise income from playing live, particularly at festivals.

Seven-figure fees are commonplace for the key festival bands in 2013-14 - acts such as Pearl Jam, The National, Metallica, the Arcade Fire, the Red Hot Chili Peppers and Blur or DJs such as Tiesto and David Guetta.

These premium acts are what festival organisers call ''white whales'' - which, they think, will pull the crowds and cover costs. But it can be a witless quest where quite often the band secured as a ''headliner'' would sell out stadiums but not festivals, such as when Neil Young and Rage Against the Machine were unpopular at the Big Day Out but sold out their own Australian shows elsewhere.

Even the most acclaimed festival in the world, California's Coachella, ran into strife this year in the hunt for the ultimate white whale.

''They are the coolest festival brand in the world,'' says an Australian festival insider. ''Whoever the headliners are is a sense of where the music world is at. But this year they wanted Daft Punk and the Rolling Stones who didn't want to play. So they had to book the Red Hot Chili Peppers to headline at the last minute because they got desperate.

''So I look at that and go 'if Coachella is desperate, everybody is desperate'.''

In Australia the issues around the sustainability of big, catch-all festivals manifests most plainly in the woes of the Big Day Out, a rite of passage for many young Australians, but an event suffering at the hands of economic, demographic and cultural changes.

Through the '90s and into the 2000s it was the only big touring festival of its kind with the bands everyone wanted to see. But not any more. This summer's shows will go ahead - with the exception of that second day in Sydney and possibly the New Zealand leg, according to insiders - but is tipped to lose up to $10 million, potentially making the event unsustainable in the near future.

Speculation is rife that the Big Day Out could fold, becoming, instead, an Australian franchise of the big American festival Lollapalooza. The Big Day Out is part-owned by US company C3, who put on Lollapalooza. The other owner is Ken West, of Sydney, who bought out founder Vivien Lees, of Melbourne, last year.

Recently the owner of the Harvest, Soundwave and Warped festivals and the Billy Hyde Stage Systems company, Arash ''A.J.'' Maddah, cancelled Harvest and joined Big Day Out.

Over the past two years, Harvest has brought bands such as Portishead, Sigur Ros, the Flaming Lips, the National and Beck to Australia for events in Brisbane, Melbourne and Sydney. This year's cancelled festival would have been held next month with Massive Attack, Franz Ferdinand, Primus, Goldfrapp and the Black Rebel Motorcycle Club.

Maddah's Soundwave festival, meanwhile, which offers hard rock, metal and punk, this year became the country's largest with an extraordinary crowd of 73,000 in Sydney in February, headlined by Metallica, Linkin Park and Blink 182.

''Ken West has left the Big Day Out building even though he is saying he's welcomed A.J. to the circus,'' says an industry source familiar with the Big Day Out hierarchy. ''Adam Zammit (the Big Day Out's Australian chief executive officer) has bought A.J. in to wangle a solution. But the Big Day Out faces a big hit this year. I can't see it continuing.''

The organisation's plush Sydney offices, in a converted warehouse in Surry Hills, are for sale and are expected to reap $5 million next month.

A source closely linked to American and European music managers and agents said the Big Day Out had also recently lost some or all control over the lucrative sideshows - the gigs that happen for individual bands at separate venues while on the Big Day Out summer tour.

''A number of artists have agreed to perform only if they get to promote their own concerts at the same time,'' the source said.

The Big Day Out organisation directed Fairfax Media inquiries to new partner Maddah, who was named the most powerful person in the local music scene in August by the Australian Music Industry Directory.

''This is where the reasonable man test comes in,'' he said in an email from Los Angeles. ''If BDO was such a basket case, why would I, the single most sensible individual in this industry, get involved?

''This is a large sewing circle with people passing on the same nonsense to each other. If these sources are to be believed, then we are all on death's (sic) bed and a meteor is headed for [Michael] Gudinski's office.''

Former Big Day Out partner Vivian Lees, who left the business in 2011, told Triple J recently the festival was in trouble and West had sold out.

Maddah declined to answer specific questions about the landmark festival's future but did not deny any of the allegations.

Whatever happens into an unknown and rapidly changing near future in the Australian music festival landscape, the Big Day Out will proceed this summer, on January 24 in Melbourne at Flemington racecourse and two days later at the Sydney Showgrounds.

The cancelled Sydney show was scheduled for January 27.

Arcade Fire, Blur, Snoop Lion aka Snoop Dogg, Flume and Tame Impala are on the bill. The ''white-whale'' headliner is vintage US grunge band Pearl Jam.

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With Marcus Teague

Correction: The original version of this story said A.J. Maddah owned the Billy Hyde musical instrument retail chain.

Chris Johnston is a senior writer at The Age writing on anything and everything including sport, music, Australian culture and people, urban and suburban affairs, art and crime. He writes 'The Crate' column in EG every Friday about lost and found music, is a judge on The Australian Music Prize (AMP) and contributes to Good Weekend magazine and The Melbourne Magazine.